[Congressional Record Volume 140, Number 12 (Wednesday, February 9, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]
[Congressional Record: February 9, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]
ELIMINATE SSI BENEFITS FOR PRISONERS
The SPEAKER pro tempore. Under a previous order of the House, the
gentleman from Massachusetts [Mr. Torkildsen] is recognized for 60
minutes.
Mr. TORKILDSEN. Mr. Speaker, one of the worst failures of Government
in recent memory has been the welfare system. For too long, welfare in
the United States has punished those who want to find a job and get off
welfare, and rewarded those who abuse the system, and waste taxpayer
dollars.
Yesterday, I read two articles from the Pultizer Prize winning Eagle-
Tribune from Lawrence, MA, which detailed two single parents caught in
the trap of welfare for over 20 years, and felons who were collecting
welfare benefits, even though the law prohibited them from doing so.
One parent with five dependents received welfare and child support
cash payments totaling $30,168 per year tax free, or the equivalent in
taxable income of $45,434. Another parent with four children received
welfare cash payments of $25,716 per year tax free, or the equivalent
taxable income of $38,730 per year.
One parent who was 45 years old said, ``I'm scared to go back into
the work system at my age. I find it easier for people to stay on
welfare once you're on because you get more benefits.'' The other
parent said, ``Many years ago, there was no way to cheat welfare. Now
it's a piece of cake. The system is hard on people who need it and easy
on people who don't.''
Yet at the same time welfare was trapping single parents, it was also
rewarding those who had no reason to collect.
Tonight, I want to focus on two more articles that focus on key
problems. One deals with the cost of fraud in the welfare system. But
the first, and the one I hope every American would find outrageous, is
that convicts in prison for misdemeanors are still legally able to
collect SSI. While felons are prohibited from collecting, those
convicted of misdemeanors can still collect while serving time. This
means that in most States, they could be serving up to 1 year, and in
some States, they could be serving up to 2\1/2\ years, and still
legally collect SSI.
The first article is entitled:
In Jail, Convict Gets $29,892
(By Brad Goldstein)
On Sept. 14, 1992, Andrew Filomia, 45, of Lawrence, was a
signature away from pocketing as much money in one day as
most people make in a year.
A U.S. Treasury check for $29,892 in Title II Social
Security benefits was delivered to Mr. Filomia at the Essex
County House of Correction in Middleton.
Mr. Filomia was serving a two-year sentence for violating a
restraining order taken out by his mother.
Essex County Sheriff Charles Reardon found the check in a
routine inspection of inmate mail, confiscated it and sent it
back to the Social Security Administration.
He said he believed inmates were not entitled to collect
Social Security behind bars. He was wrong.
State welfare rules prohibit anyone from collecting state
public assistance while locked up. Prisoners are also
supposed to lose Supplemental Security Income benefits. And
federal law bars Social Security benefits for felons behind
bars.
But nothing prevents someone serving time for a misdemeanor
from collecting Social Security benefits while taxpayers are
providing room and board in a jail or prison.
(The loophole in the law is the result of the notorious
``Son of Sam'' case.
In the late 1970s, David Berkowitz, also known as Son of
Sam, applied for and received Social Security benefits while
serving a life sentence for a series of murders in New York
City.
When the news got out, Congress rushed to pass a law to cut
him off.
``Congress said as convicted felon could not collect any
kind of Social Security behind bars,'' Social Security
spokesman Kurt Czarnowski said. ``The obvious example they
were trying to prevent was Son of Sam.''
But Mr. Filomia was entitled to receive the money because
his crimes--which also included committing forgery and
larceny under $250--are all misdemeanors in Massachusetts,
not felonies.
Mr. Filomia's brother Ralph, of Monsey, N.Y., said the
$29,892 check represented 2\1/2\ years of retroactive
disability benefits for his brother. He said he sent the
check to Middleton jail so Mr. Filomia could sign it to be
cashed. Ralph Filomia said he was following the instructions
of his brother's social worker in New York.
``I didn't want to forge his check,'' Ralph Filomia said.
``I thought I was doing the right thing. Some guard who
doesn't make that much in year was jealous and sent it
back.''
Mr. Filomia, who has a record that includes convictions for
breaking and entering and possession of heroin, contacted
Merrimack Valley Legal Services. A lawyer for the agency went
to bat for him by contacting the sheriff, who referred the
lawyer to Social Security.
The money was returned to Mr. Filomia--although after the
sheriff complained, Social Security initially withheld
$6,000, representing the time Mr. Filomia was locked up.
Mr. Filomia appealed to a federal judge to recover the rest
of his money.
The outcome of the appeal is not known. But Social Security
officials made it clear criminals serving time for
misdemeanors are not supposed to lose Title II benefits.
Title II benefits go to retirees, disabled people and
survivors.
``He's not in on a felony rap,'' said Gene Ervin, regional
inspector general for the U.S. Department of Health and Human
Services. Mr. Ervin declined to discuss what disability made
Mr. Filomia eligible for Social Security benefits.
``There are a lot of things that cause me to scratch my
head as regional director for investigations,'' Mr. Ervin
said. ``This is not a unique type situation.''
Mr. Speaker, believe it or not, this convict collected $29,892 while
sitting in prison, and the Federal law said it was perfectly legal.
Last year, I filed H.R. 3251 to end the payment of SSI to any convict
in prison. H.R. 3251 won't solve every problem with the welfare system,
but it will end one glaring and blatant abuse by stopping welfare
payments to prisoners.
The next article in the series I would like to read, deals with fraud
in the welfare system, entitled:
Fraud Often a Crime Without Punishment
(By Brad Goldstein)
Lawrence sanitation worker James R. Gerry was asked for
some identification when he walked into a Boston bank last
fall to cash a check from the City of Lawrence for $25,000.
He used his Massachusetts welfare card.
But Mr. Terry apparently failed to tell the Department of
Public Welfare about the money, which represented a
settlement of his worker's compensation claim.
Carmen ``Cookie'' Hernandez also failed to tell the welfare
department something: She was operating her own business
while collecting $668 a month in Aid to Families with
Dependent Children, or AFDC, plus food stamps and Medicaid.
It is illegal to collect welfare while also receiving
workers' compensation or owning a business, unless the
outside income is reported.
But Mr. Terry and Ms. Hernandez have been able to beat the
system.
Their stories are typical and illustrate what is wrong with
the way Massachusetts deals with fraud.
Often welfare fraud is a crime without punishment.
In some cases, as in Mr. Terry's the fraud is never
uncovered because applicants are poorly screened and routine
checks are not performed.
In many other cases, as in Ms. Hernandez', investigators
know or should know but still do nothing.
And even when welfare cheaters are caught, most still get
away with it.
The bottom line: fraud costs taxpayers tens of million of
dollars, while helping erode benefits for the majority of
recipients who need public assistance to survive.
A year-long investigation of the welfare system by The
Eagle--Tribune found:
Welfare workers and investigators fail to perform many
basic checks that could head off fraud or uncover it after it
has occurred.
Thousands of suspected fraud cases are backlogged and will
eventually be dropped with no investigation because
investigators have too many cases. The Lawrence welfare
office, the state's third busiest, has only two fraud
investigators--half as many as it had in 1989.
A pilot project at a welfare office in Dorchester found
significant fraud and saved taxpayers more than than a half
million dollars simply by having a part-time welfare
investigator perform basic background checks.
Even when welfare cheats are caught, odds are good they
will not be punished. Most cases are settled out of court,
with an order to pay restitution.
More than $100 million in restitution is owned to the
state; most will never be collected. (Story, Page 5.)
Meanwhile, state officials mislead the public about the
extend of fraud. (Story below).
Computer finds double-dippers
James Terry was one of the subjects of a 1991 Eagle-Tribune
special report on problems in the worker's compensation
system.
His name popped up again when a computer match of welfare
and workers' compensation records by The Eagle-Tribune found
137 people, including 11 city workers, collected both types
of assistance during the last two years.
They received $1.6 million in tax-free workers'
compensation.
Only eight people--5 percent--reported the money to welfare
as required by law.
Mr. Terry was not one of them, welfare records indicate.
The city tried to fire the 43-year-old sanitation worker in
April 1989 for absenteeism and failure to take a drug test
and physical examination.
But Mr. Terry had already filed for workers' compensation
for a back injury.
The city paid Mr. Terry $3,000 to settle has case, but he
later appealed to get back on the workers' compensation
payroll.
Meanwhile, he went on General Relief welfare in May 1991.
Until his eligibility ran out in April 1992, he collected
$339 per month, plus $93 in food stamps.
In January 1992, while still on welfare, Mr. Terry won his
workers' compensation appeal and was placed back on the
payroll, at a tax-free $220 a week. The city was also ordered
to pay Mr. Terry $25,406 in back wages.
Welfare recipients are required to report outside income,
including workers' compensation, so it can be deducted from
their benefits.
If Mr. Terry reported his workers' compensation, there is
no evidence of it in welfare records.
Mr. Terry was no longer on the welfare rolls last October
when he finally received and cashed the $25,000 check for
back wages. But he was still required to report it since the
retroactive pay covered part of the time he was on welfare.
Shortly after cashing the check, Mr. Terry quit his city
job. He told a supervisor ``it was time to get a real job,''
according to the supervisor.
There are other questions about Mr. Terry's case.
While collecting workers' compensation, he gave his address
as 155 Ferry St., Lawrence. He listed a different address
with the welfare department: his father's house.
If Mr. Terry was living at 155 Ferry St., another welfare
rule was broken because his wife Sharon Terry, of 155 Ferry
St., was collecting Aid to Families with Dependent Children.
The rules prohibit AFDC for women who are living with the
father of their children if he has another source of income.
There is also evidence of a third possible violation of the
rules involving the Terrys.
Lawrence Licensing Board records show while collecting AFDC
Mrs. Terry earned $6 an hour as a bartender at the Berkeley
Social Club. Like her husband, Mrs. Terry appears to have
failed to report any outside income.
The president of the club confirmed signing the document
listing Mrs. Terry as an employee but refused to say if she
still works there.
In a brief interview as he was coming out of 155 Ferry St.,
Mr. Terry denied he lived there or received public assistance
while collecting workers' compensation.
``Why are you trying to make my life miserable?'' he asked
before driving off.
In a separate interview, Mrs. Terry also denied her husband
lived with her. Wearing a gray Berkeley Social Club T-shirt,
Mrs. Terry said she worked at the club 15 years ago but
denied working there while collecting welfare.
Computer finds violators
There was little risk Mr. Terry or the other 128 welfare
recipients who failed to report workers' compensation would
be caught.
The state does not perform computer matches of welfare and
workers' compensation records. It also fails to check many
other readily available public records.
Industrial Accident commissioner James Campbell, in charge
of the workers' compensation system in Massachusetts, said he
would like to conduct matches with welfare to weed out
double-dippers. But he said the state cannot do matches
because the welfare department's computers are outdated.
Glen P. Fealy, director of the state Bureau of Special
Investigations, or BSI, the agency responsible for
investigating welfare abuses, agreed workers' compensation
could be a fertile ground for his investigators.
But he also said inefficient computers prevent matches.
``We don't have the tools to work with,'' Mr. Fealy said.
Welfare commissioner Joseph V. Gallant questioned the value
of computer matches to catch welfare cheats. ``You have to
weigh what it costs to do the matches to get one or two
people,'' he said.
The Eagle-Tribune found dozens of possible welfare abuses
in the Lawrence office by using a personal computer to match
welfare records with such public records as arrest reports,
court and jail records, business certificates, and lists of
overdue parking tickets and abandoned properties.
Seven Greater Lawrence residents were found to be running
businesses while collecting public assistance.
Thirteen received welfare here while registering cars in
New Hampshire. A husband and wife each received General
Relief benefits while registering their car from a Hampton
Beach motel.
Registering a car out of state is one way to hide assets.
A dozen people were found using abandoned properties to
collect some form of public assistance. In one case, a man
stayed on the welfare rolls for five months after a
suspicious fire destroyed the home where he was supposed to
be living.
Mr. Gallant said the welfare department does computer
matches with tax and unemployment records to find people who
are working while collecting welfare.
But welfare cheats know they will not be caught if they
work under the table and do not pay taxes.
They have little to fear even if they build up huge bank
accounts while working on the side. That is because the state
no longer does random computer searches of bank records to
find hidden assets.
Such searches were performed under the administration of
Gov. Edward J. King and were credited with uncovering a
thousand fraud cases a month.
In 1979, Legal Services sued to stop the practice, arguing
social workers should not be doing fraud investigations.
As a result of the case, Gov. King created a separate fraud
unit, the BSI, to conduct the investigations.
Welfare investigators now do bank searches only on a case-
by-case basis, said Anthony Guglielmo, head of the union
representing BSI welfare fraud investigators.
spot checks discontinued
Several years ago, some abuses that can now be uncovered by
computer checks might have been detected when social workers
visited welfare recipients' homes.
Welfare commissioner Gallant said Gov. King stopped the
home visits. He agrees with the decision.
``It's an extremely inefficient system to go out and
randomly go into people's houses,'' Mr. Gallant said. ``Even
if a man is in there, she can say he is not her husband or
the father of her children.''
He also said it was difficult keeping track of social
workers making home visits.
The welfare department and BSI also fail to perform many
simple checks to verify information provided by welfare
applicants. In many cases, the welfare department operates
essentially on the honor system.
The results can be startling when some basic checks are
performed.
Last year, the welfare department launched a pilot study in
the Bowdoin Park welfare office in Boston, the state's 14th
busiest.
Welfare workers were trained to look for signs of fraud
when interviewing applicants. Suspicious cases were referred
to a part-time BSI investigator.
The Eagle-Tribune obtained a copy of an internal report on
the results of the first year of the experiment.
It shows irregularities were substantiated in 62 of 134
cases referred for review--46 percent. In 49 cases, the
welfare application wound up being denied or withdrawn.
Taxpayers saved $523,372.
Many bogus cases were discovered with a phone call.
One call to a pregnancy clinic found an applicant lied
about being pregnant. In another case, an ``absentee'' parent
answered the phone at the applicant's home.
The report came out last April but its lessons have yet to
be applied to the state's other 47 welfare offices.
If each office was able to head off as much fraud as
Bowdoin Park did, taxpayers could save $24 million a year.
Welfare officials now say they plan to act soon.
Businesswoman on welfare
Welfare investigators can fail to catch cheats even when a
case falls into their lap.
Carmen ``Cookie'' Hernandez was reported to welfare
investigators in 1986 by Lawrence Housing Authority
officials. The LHA discovered she owned a business while
collecting public assistance and living in subsidized
housing.
But the matter was dropped.
Instead, someone told Mrs. Hernandez that she had been
reported, a clear breach of welfare department rules. She
filed a complaint with her tenant representative.
Today, LHA officials question whether the state cares about
fighting welfare fraud.
``What concerned us is when we have tenants in public
housing who are flaunting the system,'' LHA head Domenic
O'Neill said. ``We turned (the Hernandez case) over to
welfare and it was disregarded.''
Mrs. Hernandez has been on and off the welfare rolls for
seven years.
While receiving benefits and living at the Stadium Courts
project in Lawrence, Mrs. Hernandez operated the Hernandez
Shop, a bridal boutique at 317 Broadway, according to a 1986
business certificate she filed with the city.
Now called ``Party World,'' it moved to 400 Broadway
earlier this year.
At the time, her ex-husband owned a meat market. It closed
three years ago.
Mrs. Hernandez went off welfare for a while in 1989 but
continued living in public housing while running her
business.
In April of last year, LHA officials evicted her for non-
payment of rent. She then went back on welfare while
continuing to operate the bridal shop.
In a phone interview, Mrs. Hernandez, who now goes by her
maiden name of Carmen Vasquez, first denied ever owning a
bridal shop in Lawrence. She described herself as a hard-
working mother of five who baked wedding cakes out of her
home.
``I've never done anything wrong,'' Mrs. Hernandez said.
``I work at home . . . Everybody in Lawrence knows me for my
cakes.''
Asked about city records listing her as owner of the bridal
shop as far back as 1986, Mrs. Hernandez said she owned the
store for three months in 1989 but sold it to her sister and
her sister's boyfriend.
``When I was the owner, I never collected welfare. I am not
so stupid as to put my name down as the business owner,'' she
said.
People who did business with the bridal shop also identify
her as the owner.
In 1990, Mrs. Hernandez and her husband took out a business
loan of more than $10,000 from Lawrence Savings Bank. Jeffrey
Leeds, vice president of the bank, said it was for the bridal
shop operated by Mrs. Hernandez and a delicatessen operated
by her husband.
Bank officials later took the couple to Lawrence District
Court for failing to repay their loan. The bank won a $14,572
judgment but has received no money from the couple.
``We have not had a tremendous amount of success in
locating them,'' Mr. Leeds said.
Phillip Lynch of Ipswich said Mrs. Hernandez operated the
bridal business when it was located in his building at 313
Broadway from 1991 until early this year.
He said he sought to evict Mrs. Hernandez last year when
she fell behind in her rent. He said she owes $11,000.
In March this year, while on welfare and despite her claim
her sister now owned the business, Mrs. Hernandez signed a
court settlement agreeing to pay $1,000 to Mr. Lynch. She
also agreed to move the shop from his building.
Robert Avila, owner of the building where the bridal shop
is now located, also identified Mrs. Hernandez as the owner.
``She's the one who leases the building from me,'' Mr.
Avila said. ``I have a security deposit on her . . . She paid
July's rent in cash.''
Mrs. Hernandez maintained she was acting for her sister in
her dealings with Mr. Lynch and Mr. Avila. She said her
sister had to return to the Dominican Republic because of
problems with U.S. immigration officials.
``That's not my money,'' she said. ``I don't have my name
on any papers.''
Until recently, Mrs. Hernandez received $668 a month in
AFDC, plus $231 in food stamps and taxpayer-provided Medicaid
health insurance.
Records show her welfare benefits were stopped on Sept. 12
when she failed to show up for routine review of her case
after The Eagle-Tribune began questioning her.
Mrs. Hernandez told the newspaper in August she was headed
to Miami to enroll her daughter in school.
too many cases
It is not know why the Hernandez case was not pursued.
But investigators say there are too few of them and too
many cases.
The number of welfare fraud investigators has been cut 35
percent in 10 years.
There were 123 in 1983, the last year of Gov. King's term.
There are now 80.
Gov. William F. Weld, despite his antifraud rhetoric, has
cut BSI's budget twice, prompting layoffs of fraud
investigators. Some were later rehired, and Mr. Weld this
year agreed to hire 12 new investigators to perform
background checks like the ones in the pilot project at
Bowdoin Hall.
In the meantime, Lawrence has been cut from four to two
investigators.
BSI director Fealy agreed Lawrence has a backlog of cases
but refused to cite the number, which others put at 2,000. He
also defended Gov. Weld's cuts. He said he believes ``the
smaller the government the better.''
William McCarthy, the BSI supervisor for Lawrence, said one
of his investigators has more than 1,000 open fraud
referrals, 600 more than the state average.
``There is no way he can handle them,'' Mr. McCarthy said.
``They all die on the vine. they have to die on the vine.
I've made this known.''
BSI union president Guglielmo said the backlog in Lawrence
is not unique.
Welfare offices in Brockton and the Grove Hall section of
Boston also have more than 2,000 open fraud cases, he said.
He said the average BSI investigator completes 50 to 55
investigations a year. An investigator who can handle 100 is
considered special enough to get his name on a plaque at BSI
headquarters.
Because of the backlog, he estimates 30 to 40 percent of
fraud referrals are dropped simply because the six-year
statute of limitations has run out.
Mr. McCarthy said the overload hurts both the taxpayers and
the truly needy.
``The ironic thing is we have this fraud, the people who
are on it and need it, they don't get enough,'' he said. ``If
we got rid of some of this fraud then they might have more to
get by on.''
Mr. Speaker, to recap tonight's articles, convicts serving time in
prison can and are legally able to collect SSI benefits. One prisoner
in Massachusetts collected $29,892 while behind bars. I have filed H.R.
3251 to stop this practice. H.R. 3251 will end the practice of convicts
collecting welfare from their prison beds. Also welfare in the United
States is a system that often lets fraud go unpunished. This is on top
of the fact that welfare is sadly becoming a way of life for many, both
those who want go get off the system, and those who callously abuse it.
Mr. Speaker, I hope the House will act quickly on H.R. 3251, to end
the abuse of convicts collecting welfare and SSI benefits while in
prison.
I will continue reading this series at future special orders, next
focusing on other convicts who have been subsidized by the welfare
system.
____________________